Don’t plan on shopping at Walmart on Old Kings Road any time soon. That store, originally promised as a 184,000-square-foot Supercenter since 2007, and as an anchor to commercial development along that portion of Old Kings, is not going to be built any time soon.
“Walmart is pretty typical of many of the private businesses are today is that they have cut back their number of new stores, and this store was one of those that was a victim of that,” Palm Coast City Manager Jim Landon told the city council Tuesday evening. “Do we anticipate some day they will do this? Yes. Every time we talk to them it’s like it’s next year, so in 2010 t was ’11, and ’11 is ’12. We don’t really know, because I don’t think they really know.”
Walmart owns the property, Landon added, “but when they’ll go vertical in today’s economy is nobody knows.”
Click On:
- Old Kings Road Reopens, Speeding Past History
- How Old Kings Road Was Re-Routed for Wal Mart
- Behind the Old Kings Road Widening
- Walmart and Other Old Kings Road Rumors
It’s one of many examples of the collapse and lingering consequences of the commercial and residential real estate market, casting doubt on claims that the market is anywhere near a turnaround. The city is left holding two bags: an empty expanse for which it diverted Old Kings Road, and the millions it paid for that road on an assumption, now failed, that it would make the money back.
The stretch of Old Kings from State Road 100 to Town Center Boulevard closed from February 2009 to May 2010, when it was expanded to four lanes and diverted around the Walmart property, at a cost of $6.3 million. The city was originally going to issue bonds for the project. That plan imploded when the economy did. (GoToby has details here.)
“The improvements that are already completed in the southern portion of Old Kings Road is a special assessment district. The property owners have agreed to tax themselves a greater amount than the rest of the community to pay for those improvements,” Landon said. That’s partly true: property owners would be paying for the project, if they were there. But there aren’t enough property owners to assume the costs, and the properties have been devalued so much that tax assessments would have to be raised considerably to make up for losses.
Instead, the project was paid for with money out of the city’s water utility fund. It’s essentially a loan–or a shell game–until the city can issue bonds again, particularly with the rest of the four-laning of Old Kings Road, up to Palm Coast Parkway, in mind.
That, too, isn’t about to happen.
“The value of the property is the collateral for the bonds that would be issued to make them improvements, and there aren’t any bond holders out there willing to take property as collateral in today’s world,” Landon said. “In fact I spoke with our financial adviser just last week, and he almost laughed when I mentioned, OK, is there any update or any good news on bonds that would help make Old Kings Road phase two happen sooner. And after he finished laughing he said it is dead, there are no buyers for those bonds. So the issue that will be in front of us next couple of years is, if the voters approve the half cent sales tax again, is that that portion very likely will have to be resurfaced, versus widened, because it will start deteriorating, and it will need to be resurfaced unless things do turn around with the property values and therefore the bonding capability. As far as the city having the major dollars for that, that just right now is not in the cards.”
When the city justified using utility dollars to pay for the project, in January 2009, it did so on the assumption that economic growth would follow. “This is really more of an economic development initiative than anything else at this point, with the economy the way it is,” Landon told the council at the time. “This really is an opportunity to see that area start to grow with a more commercial base.”
At the time, the city portrayed the road expansion as one half of a guarantee. The other half was Walmart opening by 2011, with 400 to 500 jobs. Only one council member at the time–Bill Lewis–was skeptical about Walmart’s guarantee.
Walmart itself has been mum about its plans. The company never responded to a a set of questions about its Old Kings plans, emailed through its communications office. In the first quarter of 2011, same-store sales fell 1.1 percent in the company’s U.S. stores, the eighth quarterly drop in a row, which extended one of the company’s worst losing streaks in half a century (the company celebrates its 50th anniversary next year). The previous quarter, which included Christmas figures, sales fell 1.8 percent.
Walmart is also facing significant competition–from Target, which has expanded its grocery offerings and discount products and, elsewhere in the country, from Aldi, a giant German retailer that’s been opening smaller versions of the Walmart model since 1976. It had been doing so at a rate of 25 stores a year, but this year and next plans to open more than 180 stores. While none is planned for this region (for now), Aldi’s rapid expansion, which faces little public opposition because it’s more subtle and generates less of a physical impact than Walmart’s boxy stores, is undercutting Walmart’s plans to turn around its own sales and return to the sort of profitability it once assured shareholders.
In response, Walmart has been opening small, 40,000-square-foot neighborhood stores, and is opening its own first smallest-scale store, called Walmart Express, this very week, in Gentry, Ark. Instead of 100,000 square feet, it’s a 15,000-square-foot building. The focus on smaller stores has contributed to the company’s delay–or scrapping–of plans for some larger stores.
Addressing restless shareholders, the company on Friday also said it would buy back $15 billion of its own shares–the same amount it bought back last year–to improve returns for shareholders.
palmcoaster says
Hope the Coquina Desalt Project will be stopped before too late too. What were they thinking? Castles in the sand? C’mon… our taxes are funding it all. Stop spending what we do not have. In America we can any longer plan for long term credit or promises. Specially corporate promises that are deceiving and whispers in the wind..We can add this Walmart to; Palm Coast Data, Cakes Across “Darby and Co” and Centex/Palm Harbor Resort fiasco, did I forget any other?. Looks like our officials never learn .These blunders keep popping up like cockroaches when we flash them down the toilette.
Can the city of Palm Coast instead reply to the latest request from a local residents group questioning the legality of ITT selling all our paid amenities of over 30 years “grandfather in” like; our golf courses including the eyesore now Matanzas Woods one, our Palm Coast Marina, our Players Club along with our Ocean Front pool and cabanas where Ginn Resort seats now? That is what our officials should be doing besides promoting our wonders to businesses outside our area. Maybe an outside Florida legal team should be invited to look into this matter as totally contradicts ITT filings with the FTC C-2854 Exhibits in Atlanta and recorded as well with Land Sales at HUD when Palm Coast development and marketing commenced in 1972? Any more light can be shade here, anyone? Would be great to be able to recover from former Centex now Pulte, the 5 million or so we had to spend to repair the Palm Harbor Golf Course….and get “our marina” back.
lawabidingcitizen says
That’s how competition, free enterprise, capitalism works and that’s why public moneys should never be spent for “economic development.” If it’s a good idea, like Walmart, others will jump into the market and either sink or swim on their own merits.
Be nice to have a piece of honest reporting on all of Town Center and millions of taxpayer dollars spit into the wind to build and maintain the fiction that it’s a viable entity. Now almost 200K will be spent on lighting upgrades to attract more events in Central Park. Why do we tax payers want more events? They cost money to stage and bring no gain at all.
Justice for All says
So the property owners who agreed to a special assessment to pay back the City are now going to pay less or just not pay?! The newspaper reported about a month ago that the City’s bond rating was lowered but that was interpreted as “having no effect on the City.” John Q. Citizen, try telling your mortgage company and your credit card company that your source of income has dried up but it will have no effect! If the utility is such a cash cow, pay off the bonds and lower our rates and stop using it as a piggy bank. Charlie Erickson, you’re getting this, right?!
PalmCoastPioneers says
Reply to Palm Coaster:
Federal Trade Commissions’ ‘Consent Agreement’ , filed in Washington, D.C. and on the Federal Trade Commissions website:
International Tel. and Tel. Corp., et.al., Docket # C-2854, Findings, opinions and orders, July 1, 1976-December 31, 1976 Volume 88 , a F.O.I.A. requst will give you the 15 year Federally ordered ‘ Compliance Report’ with Exhibits A and Exhibits B; Atlanta Federal Trade Commission is allegedly the ‘Monitor’ with detailed Exhibits showing the Federally required REDRESS ‘; I.L.S. (Interstate Land Sales) recorded with H.U.D. is: ILS# 29870
Strongly suggest you google / read the publication : ‘…An Approach to a New City; Palm Coast..’ circa 1972 by Dr. J. Norman Young, ‘Father’ of the ‘Palm Coast Project’.
Joe says
It would be nice if the city could break at least even when waisting the tax payers money, Ginn, PCD and now walmart.
rob says
…”Only one council member at the time–Bill Lewis–was skeptical about Walmart’s guarantee.”
Why was there only one council member who had the wisdom and foresight to question a so-called guarantee?
If it wasn’t in writing then it wasn’t a guarantee.
Once again the city is left holding the bag after some so called promise. Remember the hotel and restaurant that was torn down based on a promise.
I am not a teabagger , however I do agree that change is necessary and most of this group on the council has got to go. Four year terms are far too long, the terms should be shortened to three years.
And the town manager should also be shown the door. The citizens should demand that the next town manager ‘s salary commence at $100,000. I have heard enough BS that you have to pay more to get more.
billybob says
In the meanwhile, since there are currently no businesses or private driveways along that stretch of road from SR100 to Town Center Blvd, how about raising that utterly bogus 40mph speed limit up a bit before I get a ticket? It should be at least 45, although the wide divided median 4-lane would easily support 50. Even the 2 lane section to the north is 45mph (which also seems low, btw).
mara says
Wal-Mart not coming? You know what? I’m fine with that, but they should have to reimburse the city for some of the advance work done, including the road improvements. If they refuse, I hope Landon, et.al, sue the crap out of them. In the meantime, can we encourage businesses to come here that pay a decent wage and that don’t treat their employees like slaves?
And, seriously…
“Why do we tax payers want more events? They cost money to stage and bring no gain at all”
Speak for yourself. Some of us tax payers have children–and it is damned nice to be able to pile into the car and drive right up the road to do things like attend the Rockin’ RibFest or go see a free movie in the park. We had to pay to go to the RibFest (and it wasn’t quite as good as the first one), but it’s a great day out with my two kids and the neighbor kids–and we saw a lot of folks ‘networking’ in the booths, obviously trying to make a living and encourage other businesses to come here. The free movies, in particular, are welcome–sure, they’re not first-run, but so what? It gets this brood out of the house with us once in awhile, where we can do things together as a family!
I wonder if the person who posted this would rather have these kids kicking around the neighborhood with nothing else to do but get into trouble? How selfish it is to gripe about such things all the time, just because maybe you don’t use a particular service that others use? Sure, you live here and pay taxes–but so do we.
If you don’t want to help make our city a better place to live for **all of us**, perhaps you should look for a place to live where you don’t have to pay taxes at all? Uh, good luck with _that_…
rickg says
A good example of what happens when we bow to the retail god of Walmart. A pox upon our country and a blemish upon our culture. I wouldn’t waste a tear if Walmart disappeared tomorrow.
Joe says
Holding a bag full of empty promises, good one, I feel the same way after voting in the elections in this county!!!